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CMHC & Genworth to raise premiums - How & when will this affect you?

Posted on March 5, 2014 by Michael Wilcox

Last week CMHC (Canadian Mortgage Housing Corporation) announced it will raise premiums as of May 1st. Genworth, the largest private insurer followed suit a couple days later. They say it is to cover new capital requirements that came into effect since the "great recession" a few years ago. There are 3 main insurer's in Canada. The other one is Canada Guaranty. They may also follow.

This kind of insurance is required for someone who is buying a home with less than 20% down payment. It's a one time fee that's based on a percentage of the mortgage taken out. It can be paid up front or added onto the mortgage. On a 400K mortgage with 5% down the additional premium is about $1600. It will also result in an average $5 increase in your mortgage payment should you choose to add the premium to the mortgage proceeds.

Here's a breakdown of the increases along with CMHC's question & answer media release

Effective May 1st the following rate increase will come into affect for insured mortgages: Please see the linked news release from CMHC: